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A trawler belonging to China Fishery Group. (Photo: CFO)
China Fishery seeks US protection against bankruptcy
HONG KONG
Friday, July 01, 2016, 23:10 (GMT + 9)
China Fishery Group, along with more than 15 affiliates, has filed for Chapter 11 bankruptcy protection in New York intended to protect its assets and stop a forced sale at fire-sale prices.
Court papers reveal that the Hong Kong based firm has sought US bankruptcy protection four months after defaulting on USD 300 million of bonds amid investigations by market regulators in Singapore and Hong Kong, The Business Times reported.
Market experts reported that four other affiliates, including Pacific Andes Resources Development, which is also listed on Singapore Exchange, filed for Chapter 15, the part of the bankruptcy code covering international insolvencies.
By filing for bankruptcy in New York, the company will receive the benefits of the US bankruptcy law, including the so-called automatic stay preventing bondholders and other creditors from seizing its assets, Bloomberg informed.
In this way, the initiative allows the group to fend off creditors and bondholders from seizing its assets, primarily the fishery business in Peru it acquired from Oslo-based Copeinca ASA in 2013.
Statements in the court petition show that the companies in the group “have been facing severe financial stress and encountered extreme challenges in their efforts to resuscitate and revive the business” after going in and out of provisional liquidation. Besides, recent correspondence from certain creditors suggested the company could face “hostile and aggressive action”.
Company sources informed that the Group is seeking the authority to operate as debtor in possession, a role that gives it exclusivity to seek funding or propose a debt restructuring plan in the coming months without the threat of legal actions from creditors.
Related articles:
- China Fishery Group will sell its Peruvian businesses for USD 1.7 billion
- China Fishery Group's credit rating downgraded due to unpaid loan
- Court appoints liquidators for China Fishery
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